British Gas has compensated all existing customers who received an inaccurate quote on the savings they could make when signing up, in-store, to a Sainsbury's Energy tariff. Similar issues arose on a smaller scale in British Gas tariff sales made face-to-face in Westfield Shopping Centre.
When sales of energy are carried out face-to-face, energy companies must provide an estimate of what the next year's bill would be if the customer switched.
Between February 2011 and March 2013, in 5% of face-to-face sales, the savings quoted by British Gas employees to prospective Sainsbury's Energy and British Gas customers were overstated. In some cases customers were told that they would save money when in fact, it was more expensive to switch to Sainsbury's Energy or British Gas.
When British Gas discovered this through its own internal checks, it took swift and decisive action to contact and compensate customers. British Gas also proactively informed Ofgem of what had happened and the steps it had taken to compensate customers.
British Gas has re-calculated the quotes of those affected and has fully compensated all current customers. An average payment of around £130 has been made to more than 4,300 Sainsbury's Energy and British Gas customers. This includes around 1,300 customers who could not be contacted and who have had an automatic refund applied to their account.
Ian Peters, Managing Director of British Gas Residential, said:
"We are very sorry and have ensured no customer will be out of pocket as a result. We're pleased that Ofgem the energy regulator recognises the actions we have taken to ensure the right outcome for our customers.
"We pride ourselves on our high standards and it is extremely disappointing when even a relatively small number of customers don't receive the service they expect from us."
British Gas has provided compensation of almost £400,000 to customers it has contacted (around £350,000 for Sainsbury's Energy customers and around £50,000 for British Gas customers). In addition, for customers who could not be contacted, British Gas re-calculated their quote and has provided a refund and compensation, totalling £170,000 (around £140,000 for Sainsbury's Energy and around £30,000 for British Gas customers).
All customers due this payment have already received it as a credit on their account and no action is required on their behalf. Through an independent audit, British Gas was able to identify all existing customers affected and take proactive steps to address the issue. The audit also identified 1,300 potentially affected customers who are no longer with British Gas. The maximum possible financial impact to these customers is £161,000, which British Gas will be donating to the British Gas Energy Trust.
Separately, suppliers are required to clearly identify themselves to customers as part of the energy sales process. Between February 2012 and May 2013, British Gas branding was not present on Sainsbury's Energy uniforms, badges and sales display stands. As a result, some customers may not have realised that British Gas was a partner in Sainsbury's Energy. This was immediately addressed by updating all Sainsbury's Energy branding to include a reference to British Gas. A separate payment of £273,019 will be made to the British Gas Energy Trust in recognition of this issue.